Eloro Resources Ltd.

Eloro Resources Ltd.

February 02, 2010 08:15 ET

Eloro Resources Begins a 6,000 m Surface Diamond Drilling Campaign on the Simkar Gold Project, Val d'Or (Quebec)

TORONTO, ONTARIO--(Marketwire - Feb. 2, 2010) - Eloro Resources Ltd. (TSX VENTURE:ELO)(FRANKFURT:P2Q) ("Eloro" or the "Company") is pleased to announce the start of a 6,000 m surface diamond drilling program on the Simkar Gold Project (the "Project") located in the prolific Abitibi Greenstone Belt, 20 km east of Val-d'Or (Quebec). The Project consists of two contiguous mining concessions totaling 226 hectares in Louvicourt Township, and is wholly-owned by Megastar Development Corp. (TSX VENTURE:MDV) ("Megastar") and under option to Eloro.

The drilling program is expected to validate historic intersections and the down plunge extension of the historic gold zones, and will incorporate the results into the 3-D mine model to help refine the projection of the gold structures from surface to below the 200 m level. Eloro is of the opinion that the presence of higher grade tension veins intersected on the Project by Megastar in 2007 surface diamond drilling (140.0 g/t gold over 0.5 m, 99.8 g/t gold over 0.3 m, 33.9 g/t gold over 1.0 m, and 31.0 g/t gold over 0.5 m) represents strong evidence of the similarities of the Simkar Gold Deposit with the 9 million ounce Sigma–Lamaque Gold Deposit located 20 km to the west.

Eloro and Megastar are in the first year of a Formal Option and Joint Venture Agreement (the "Agreement"), executed August 14, 2009. The Agreement provides Eloro with the option to earn a 50% undivided interest in the Project by completing $4 million in exploration work on the Project over a 3 year period, whereby $750,000 would be incurred in the first year, $1.25 million in the second year and $2 million in the third year; paying Megastar $350,000 cash over a three year period, and issuing 4.5 million common shares of Eloro to Megastar as follows: (1) 750,000 common shares issued upon execution of the Agreement (2) 750,000 common shares on the first year anniversary of the Agreement, (3) 1.5 million common shares on the second and third anniversary of the Agreement. Should Eloro elect to utilize the six month extension on either the second or third year's exploration commitments, Eloro would issue an additional 100,000 common shares to Megastar. Eloro is the Project manager and operator.

The Simkar Gold Project

The Project is located within the Abitibi Greenstone Belt and hosts a thick sequence of east-west trending, near vertical dipping volcanic flows and pyroclastics of the Malartic Group (the "North Rhyolite") that also includes quartz-feldspar porphyry dykes and sills, closely associated with the lode gold vein mineralization and the, little-investigated to date, Noranda or Matagami-type volcanogenic massive sulphide (or "VMS") deposits. The higher gold grade, intrusion-centered gold-quartz-tourmaline vein system is similar to the 9 million ounce Sigma-Lamaque Gold Deposit in Val-d'Or and many other gold deposits in the Abitibi Belt. Prior gold production on the Project (1946-1949) came from extensive underground workings along three main zones (A, B and C Zones). More recent exploration outlined three new gold zones (Pillar Zone, F Zone, and Montana Zone) and identified one high potential structure, the East Zone Shear.

The Project has been the subject of two National Instrument ("NI") 43-101 compliant technical reports, one in 2004 and a second in 2008. The first was titled "Technical Report (NI 43-101 F1) on the 2004 drilling Program, Simkar Property (Val-d'Or, Quebec), Louvicourt Township, Province of Quebec, Canada (NTS: 32C04)", by C. Pelletier, B. Sc., P. Geo. (of InnovExplo Inc.), dated December 6, 2004. The 2008 report titled "Technical Report (NI 43-101) Simkar Property , Val d'Or, Quebec" (the "Report") was prepared by M. Bourgoin, P. Geo., of MRB & Associates, and R. Sandefur, P. Eng., of Chlumsky, Armbrust and Meyer LLC. Both reports are available on SEDAR at www.sedar.com (under Megastar Development Corp).

Following the original discovery, the Project produced 261,590 tons of ore grading 0.123 oz/ton gold for 30,500 ounces of gold from 1947 to 1949. This production was from the A, B and C Zones. Operations were suspended due to increased mining costs at a time of fixed gold prices.

From 1987 to 1993, over $12 million of surface exploration and underground development work was completed on the Project. The exploration work successfully defined significant gold mineralization in the extensions of the previously mined A,B and C Zones, as well as defining new gold resources in three new gold bearing structures, the East, F, and Pillar Zones. Subsequently, the existing underground workings were dewatered and new underground development was completed to access the East Zone on two levels. This underground development work led to the extraction of 71,068 tonnes grading 8.42 g/t gold for approximately 20,000 ounces of gold.

Megastar acquired all rights, titles and interests of the Project in 1996. Since then, Megastar completed ground geophysics; surface diamond drilling totaling 8,000 m in 26 holes; and integrated the former Simkar Gold Mine underground workings into a GEMCOM™ GEMS 3-D mine model. This work led to the Report and mineral resource estimates in 2008 which are outlined in the following table to a vertical depth of -200 m:

1.0 1,482,000 3.01 143,160
2.0 641,050 5.10 105,100
3.0 347,400 7.32 81,800
5.0 188,750 10.23 62,100

* Numbers are rounded.

About Eloro Resources Ltd.

Eloro is a junior exploration company focused on discovering and developing precious and base metal quality resources in the James Bay region of northern Quebec, and base and precious metals in the Timmins Camp of northern Ontario. Eloro currently has eleven gold-copper-silver properties (1,062 claims) covering 548 km2 in the La Grande and Eastmain Greenstone Belts, proximal to Goldcorp's Eleonore Gold Project. Eloro also has an option to earn a 50% interest in 31 claims held by Virginia Mines Inc. also located in James Bay, Quebec. The Timmins area holdings include both the prospective Hurdman Property, and the 30 km2 McArthur Lake Nickel Property under option to Fletcher Nickel Inc.

The information contained in this news release was prepared and revised by Martin Bourgoin, P. Geo., Eloro's Executive VP, and a Qualified Person as defined by National Instrument 43-101.

Statements made in this news release that are not historical facts are "forward-looking statements", and readers are cautioned that any such statements are not guarantees of future performance, and that actual developments or results, may vary materially from those in these "forward-looking" statements.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Eloro Resources Ltd.
    Thomas G. Larsen
    President and CEO
    (416) 868-9168
    (416) 361-1333 (FAX)
    Eloro Resources Ltd.
    Jorge Estepa
    (416) 868-9168
    (416) 361-1333 (FAX)